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Assocham seeks urgent government intervention on wider impact of AGR ruling

The apex court in its order of October 24 had said that all revenue belonging to a telecom licensee — not just revenue from telecom services — should be accounted as gross revenue, for calculating AGR. License holders pay 8% of AGR as license fee to the government.

, ET Bureau|
Nov 28, 2019, 07.20 PM IST
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The apex court in its order of October 24 had said that all revenue belonging to a telecom licensee — not just revenue from telecom services — should be accounted as gross revenue, for calculating AGR. License holders pay 8% of AGR as license fee to the government.
Industry lobby group Assocham has sought ‘urgent intervention’ of Telecom and IT minister Ravi Shankar Prasad to resolve the crisis emanating from the wider implication of Supreme Court’s order as per which even ISP, ILD, NLD, VSAT and other non-telecom license holders have to count all their revenue to calculate adjusted gross revenue (AGR).

The industry body estimates that companies across sectors would face Rs 2.5 lakh crore as payments for the last 10 years, which can rise further, once all companies impacted by the judgment are identified and counted for previous years. In a letter to Prasad dated November 27, the industry body has urged the minister to step in to avoid the unprecedented financial crisis across sectors, and to ensure business continuity and investments.

“The implementation of the Hon'ble Supreme Court Judgement in 90 days will lead to huge financial crisis in many companies having telecom licenses, even though their revenues are mainly from non-telecom businesses/activities,” said Assocham secretary general Deepak Sood, in the letter.

“We urge the government to intervene to avoid the unprecedented situation across sectors as a consequence of the recent judgment,” he said in the letter, seen by ET. “We seek your urgent intervention to resolve this crisis in the industry to ensure the continuity of business, investment in the sector and to meet the vision of 'Digital lndia'.”

The apex court in its order of October 24 had said that all revenue belonging to a telecom licensee — not just revenue from telecom services — should be accounted as gross revenue, for calculating AGR. License holders pay 8% of AGR as license fee to the government.

While the DoT has sought legal opinion on the issue of wider implication, it has protectively asked all license holders to pay up license fee on their own calculations of AGR, and pay it within the stipulated time frame. Some of the affected companies, like PGCIL that holds ISP and INLD licences, have decided against paying any additional demand that the DoT may raise in future, beyond what the power transmission company has already paid.

Other companies may approach their respective ministries to seek government intervention in the matter, people aware of the issue in the government said.

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